ICE and Black Knight agree to sell Empower, revise terms

Many deal observers anticipated that Black Knight would sell its Empower loan origination platform in order to get regulatory approval for Intercontinental Exchange’s acquisition. The announcement came one day after a published report that the Federal Trade Commission would file a lawsuit to stop the deal. The press release announcing this deal stated that ICE had committed to, among other, litigating with the FTC to obtain approval for the merger in connection with the amendment of the merger agreement. The Empower sale depends on the ICE/Black Knight deal closing. ICE will also reduce Black Knight’s compensation to $75 per share in stock and cash for a $11.7 billion valuation. Black Knight closed on March 6 at $58.45 per shares. Black Knight traded at $60.27 per share on Tuesday morning after the news broke. This was the highest price since February 27, when Politico reported that the FTC would be filing a lawsuit against the company. In the past, opponents to the deal, such as the Community Home Lenders of America CEO David Stevens and the former CEO of the Mortgage Bankers Association, have said that a sale of Empower is not sufficient to allow regulators to approve the transaction. Constellation Software, a Toronto-based company is the proposed buyer for Empower. The company declined to comment. Terms of the transaction were not disclosed.Truist Securities was the financial advisor for ICE and Black Knight for the sale, which includes the Exchange, LendingSpace and AIVA systems.LendingSpace is a loan origination system used by correspondent aggregators that Black Knight forerunner Lender Processing Services acquired in 2012.AIVA is the artificial intelligence technology which came with Black Knight’s 2018 purchase of HeavyWater.Among Constellation Software’s subsidiaries is Constellation Mortgage Solutions, the parent of Mortgage Builder and ReverseVision.Constellation Software “will not take over the day-to-day management of its businesses,” a page on the company’s website about acquisitions states. “We continue to rely upon the managers and employees at our subsidiaries to run their business well.